Oxford Street, one of London’s most iconic shopping destinations, is facing a growing problem of so-called “dodgy shops,” officials and experts say, resulting in substantial losses in unpaid business rates and raising concerns about the wider impact on the retail sector. Following the departure of established brands after the pandemic, the thoroughfare has seen a surge in American candy outlets, souvenir sellers, and unofficial Harry Potter-themed shops, many of which operate through a pattern of companies frequently dissolving and restarting to evade tax liabilities.

Westminster City Council reports that these practices accounted for approximately £9 million in unpaid business rates in 2023 alone. The council has highlighted the issue’s severity by noting its presence in such a high-profile location, suggesting that the problem is widespread in London and, more broadly, across the UK.

Experts warn the infiltration of illegitimate retail operations on Oxford Street is emblematic of systemic challenges. Duncan Stephenson, representing the Chartered Trading Standards Institute, said the prevalence of these shops in a major tourist hotspot damages the reputation of the UK’s high streets, indicating a broader national problem.

Political figures have also voiced criticism. Laila Cunningham, Reform UK’s candidate for London mayor, described the proliferation of such businesses as a symbol of government failure, emphasizing that these spaces should be occupied by enterprises that contribute positively to the economy through job creation and tax compliance. Cunningham pointed to links between many of the shops and dissolved companies, as well as repeated allegations of misconduct.

Unlike other regions where “ghost shops” might appear deserted, investigations suggest that many central London operations remain profitable but deliberately circumvent financial responsibilities by exploiting legal loopholes. Josh Nicholson of the Centre for Social Justice explained that operators commonly engage in “phoenixing,” closing down only to reopen under new identities quickly, thereby avoiding business rates and VAT payments. Some have also been implicated in illegal working offenses.

This business model, Nicholson added, allows shop owners to reduce costs significantly by employing “ghost directors” and other tactics, enabling them to outperform legitimate businesses. The result is a retail environment where lawful shops struggle to compete against those operating with limited oversight or accountability.

Attempts to engage with shop owners on Oxford Street revealed hostility and intimidation. Journalists visiting several locations encountered threats of violence, evasive staff who could not identify business owners, and breaches of legal requirements such as failing to display registered company names. In one instance, police discovered an underground tunnel hidden beneath a souvenir shop containing counterfeit goods valued at £80,000.

Westminster Council has acknowledged these challenges and confirmed it is working with trading standards officers and law enforcement to address the issue. Councillor Tim Barnes stated that local officials have themselves been subjected to bullying and intimidation during enforcement efforts. He expressed frustration at limitations in the council’s powers to tackle tax avoidance and fraudulent activity, calling for additional support from the government and cooperation from the public and police.

Barnes urged shoppers and lawmakers to assist in addressing the crisis, emphasizing the need for stronger legislation, increased resources, and community reporting to dismantle these illicit operations and restore integrity to one of the nation’s most famous retail streets.